On Wednesday, February 19, Apple unveiled its latest budget model iPhone 16e with a price tag of $599. Apple aims to capture a larger share of the mid-range smartphone market and compete against rivals such as Samsung and Huawei with this new phone.
The new device ditches Apple’s low-cost SE series naming convention and will compete with Android smartphones.
As consumer electronics manufacturers seek artificial intelligence tools, Apple released a new version of a budget phone. Priced at $599, the iPhone 16e will hit the market later this month, offering features closer to Apple’s flagship products, including the use of powerful chips running Apple Intelligence.
The new iPhone 16e eliminates the Home button and fingerprint sensor, opting for Apple’s Face ID scanner and a modern design with a sensor notch at the top of the screen. It is powered by the Apple A18 chip, similar to what the flagship iPhone 16 model uses. The upgraded processor means the iPhone 16e can run all the same applications and games as the more expensive iPhone models. The 16e is available in black and white.
This phone also comes equipped with Apple’s first cellular modem, known as the C1. In the past years, iPhones have used Qualcomm modems. The 16e features a single camera lens, while the most advanced iPhones have three camera lenses.
With fluctuating sales performance in recent quarters, Apple is striving to drive growth in its most critical product category, hence the release of this new low-cost iPhone. As of the December 2024 quarter, iPhone sales decreased by 1% year-on-year. However, Apple still managed to sell phones worth over $69 billion during that period.
Low-cost iPhones are crucial for Apple as they help bring in new customers into the Apple ecosystem, with the new devices supporting Apple Intelligence and enabling features like image generation and notification summaries on Apple’s most affordable smartphones.
According to data released by Canalys on January 16 this year, Apple shipped 13.1 million phones in China in the fourth quarter of 2024, maintaining a market-leading position with a 17% share. Canalys data also shows that Huawei held a 17% market share with 12.9 million shipments, nearly on par with Apple in the market lead.
In the Chinese market, Apple faces challenges not only from the country’s slowing economy but also from intense competition from local brands like Huawei. Additionally, the Chinese authorities favor Huawei over Apple, exacerbating Apple’s difficulties in the Chinese market.
Apple’s current flagship models are the iPhone 16 starting at $799 and the iPhone 16 Pro starting at $999. Prior to the release of the iPhone 16e, only the iPhone 16 and iPhone 15 Pro models supported Apple Intelligence features.
“16e might help Apple stand out in cost-sensitive markets like Europe and China, as buyers in these markets tend to prefer prepaid phone costs,” said Ben Bajarin, Chief Analyst at consulting firm Creative Strategies.
Previous iPhone SE models were known for their smaller screen sizes, but the latest generation 16e comes with a 6.1-inch display, the same as the iPhone 16 model. According to Counterpoint Research, the share of SE model sales in total iPhone revenue has dropped from 10% since its launch in 2016 to about 1% last year.
The iPhone 16e will be available for pre-order in 59 countries/regions, including the US, China, and India starting on February 21, with shipping commencing on February 28.
In recent years, Apple has quietly released new products through press releases, such as the new Mac launched in September last year. Apple may be testing how much attention a low-key release can attract. Ahead of this Wednesday’s launch event, Apple CEO Tim Cook hinted at the new family member by posting on social media last week: “Get ready to welcome the new member to this family.”
(This article refers to reports from Reuters and CNBC)